Facebook may reveal new Android smartphone

By Brandon Bailey, San Jose Mercury News

Wednesday, April 3, 2013

MENLO PARK -- Tech industry insiders expect Facebook to unveil a new Android smartphone on Thursday that will showcase the social network on the device's home screen, and make it even easier to use Facebook's popular services on the go.

But some experts aren't convinced there's a huge demand for a so-called Facebook phone, when many consumers prefer to choose from a variety of competing apps and services.

"What happens if you buy a Facebook phone and decide you don't want to be a Facebook person?" asked Will Stofega, a veteran mobile technology analyst with the IDC research firm.

"Everybody has their own preferences when it comes to apps," he added, noting that younger users especially are known for experimenting with new or trendy services for messaging, photo-sharing and other activities.

Facebook hasn't said exactly what it plans to announce at Thursday's event, although an official invitation offered to let reporters "see our new home on Android." But in recent days, several industry blogs and news outlets, citing unnamed sources, have said the company will show off a new phone, built by the Taiwanese hardware-maker HTC, that uses special software to feature Facebook's programs on a version of Google's Android operating system.

The phone is expected to display Facebook content, such as updates and posts from friends, on the home screen that appears when the device is turned on, according to these reports. It may also be designed to automatically use Facebook programs, including its messaging app and photo-sharing software, as the default services for the phone.

By making it easier for people to use Facebook's services, the company is clearly hoping to deliver more mobile advertising to those users. "The deeper that Facebook can get its users engaged, ultimately the more ad revenue they can get," said Clark Fredricksen, a vice president at the research firm eMarketer.

The company has already made what Fredricksen called "astonishing" progress in building a mobile ad business over the past year, after it was criticized last spring for making virtually no money off the growing number of users who access the social network on smartphones and tablets.

Facebook reported more than $300 million in mobile ad sales last quarter. Its share of the U.S. mobile advertising market grew from zero to nearly 10 percent in 2012, according to eMarketer, which estimates Facebook will garner 13 percent of the $7.3 billion spent on mobile ads in the United States this year.

That makes Facebook an increasing threat to its Internet rival, Google, which still dominates the market because it shows more mobile ads when people use Google's search engine and other services on both Android and Apple phones.

Facebook users are clearly mobile: More than half its 1 billion active members check the social network regularly on their smartphones or tablets. And at the end of last year, researchers at comScore estimated Facebook outpaced Google Maps as the most frequently used smartphone app in the United States.

But experts say the business of selling smartphones may be difficult to crack. HTC had little success with earlier phones that came with a Facebook "button" pre-installed, Stofega said. And wireless carriers may be reluctant to promote a new HTC phone in their retail outlets, since HTC has become a much less popular brand than Apple and Samsung.

Still, analysts say a Facebook- HTC phone could serve as a showcase for Facebook's services, in the way that Google has partnered with different phone-makers to build a series of Nexus-brand phones that showed off the latest features of Android and other Google services.

CEO Mark Zuckerberg has previously insisted he doesn't want Facebook to build its own phone, since he wants the social network to be available on a variety of phones and operating systems. Facebook has also worked with Apple to make its services easier to use on new iPhones. And some news outlets have reported Facebook will also announce a new app Thursday that owners of other Android phones can download to create an interface similar to the new HTC phone.

That strategy might give people more flexibility to use Facebook when they want, analysts said.

"The idea of developing a version of Android that is deeply integrated with Facebook is a good idea, in theory, for Facebook," Fredricksen added. "But it's unclear whether or not consumers will feel it's a good idea for them."